In business, luck can change overnight and sales can melt away.
Chicago ice cream entrepreneur Kris Swanberg thought herself fortunate to be able to parlay an ice cream maker she received as a wedding gift into a new business opportunity three years ago. The fresh fruit and interesting flavor combinations, combined with organic ingredients, made Swanberg’s Nice Cream an instant success at local markets such as Green Grocer.
A wrench in company’s progress
But Swanberg said she was thrown for a loop when the Illinois Department of Public Health called her and threatened to shut down her ice cream business if she doesn’t obtain a dairy license and comply with stringent requirements for production and ingredients that large dairy foods companies must adhere to.
“We were totally taken off guard,” Swanberg said, relating that the state told her in a phone call that she would need to comply with the costly regulations that could force a recipe change. Swanberg says she has done nothing wrong and her product is safe. So she intends to help change what she believes is unnecessary regulation that will keep other entrepreneurs from bringing new products and new jobs to the marketplace.
Nice Cream is licensed to operate by the city of Chicago and has been health inspected, she said. The company uses pasteurized milk and, in essence, re-pasteurizes the product after adding ingredients by bringing the ice cream mix to a high temperature and cooling it down. But the state doesn’t approve of the method, she said.
Instead of throwing in the towel due to the state’s requirements, however, Swanberg plans to petition the state to exempt artisan ice cream companies from the rules. “I will write a proposal with the help of legal advisers that will would place Nice Cream in a different category from huge corporations” making ice cream.
A similar act, called the Illinois Local Food Entrepreneur and Cottage Food Operation Act, is currently awating Gov. Pat Quinn’s signature, according to a Chicago Tribune report. But it won’t apply to small dairy foods manufacturers, such as artisan ice cream companies, Swanberg said. Still, she is hopeful that increased awareness of the importance of locally produced foods will help get an ice cream measure passed.
While the state official told Swanberg she could sell through her existing inventory, the timing of state’s phone call at the peak of ice cream season couldn’t be worse, she said. In addition, Swanberg recently spent about $6,000 to redesign her package and add a nutritional label at the request of Whole Foods Market, which now has said it won’t carry the product until Swanberg complies with the state, she said. Nice Cream has been available in about 25 local markets, including three local Whole Foods Markets and was set to expand to four more Whole Foods locations, she said.
An easy fix?
The state official said an easy fix would be to swap Swanberg’s healthy recipe for a premix , trade fresh strawberries for strawberry syrup, but that could ruin the product’s reputation. Full compliance would require Swanberg find a new location to make her product, because the shared commercial kitchen in Logan Square that Nice Cream has been using won’t meet state requirements, she said. She also would need to purchase a pasteurizing machine would cost about $40,000, more than Nice Cream makes in profits in a year, Swanberg said.
Swanberg, a former teacher who lost her job when her Chicago public school closed a few years ago, started making ice cream in her spare time. Today, her gourmet Nice Cream sells for $8.99 a pint in local food markets plus farmers markets. “I was very lucky I got an ice cream maker as a wedding present,” she said, which inspired her to try something new.
Swanberg’s first break occurred in August 2008 when a friend encouraged her to sell her ice cream at a bake sale she was having. Swanberg sold out in two hours. By October, she was selling to Green Grocer, making every pint herself, using the KitchenAid appliance and the freshest ingredients she could find. As demand grew, she bought a small commercial ice cream maker, leased space in a commercial kitchen and hired two workers.
She purposely limits production to a few flavors per season, such as Cream Cheese Ice Cream with Carrot Cake Pieces, Earl Grey Tea with Shortbread Cookies, Honey Pistachio and Lavender Vanilla Bean. “I wanted to do unique flavors and change it up,” she said.
Swanberg uses local ingredients whenever possible. “We try to do what we hope our customers do — buy local and organic ingredients,” she said. Her instinct to rotate flavors by season, taking them off the market to make way for new varieties, turned out to be a good business decision, because sales typically peak during the transition periods, she said.
Consumers like the unusual flavors and high-quality ingredients, said Cassie Green, owner of Green Grocer, in an earlier interview. “Once people try it, they come back and buy two, three and four pints,” Green said. “She’s the star of our ice cream case.”
Despite the unexpected obstacle the state has thrown at her, Swanberg still has a positive attitude. “I still feel incredibly lucky that I was able to start the way I was — through luck and a lot of people’s support,” she said. In particular, the Chicago food community helped the entrepreneur get established.
Now, she is hoping others will join her effort to change the state requirement for artisan ice cream and dairy foods companies. The alternative, she said, could wipe out startups. “With any small business, there are obstacles along the way. But this is the only obstacle that we think could shut us down,” she said.
— Ann Meyer